DOL Issues Guidance On Small Business Exemption From COVID-19 Leave Law

Staying Open: small businesses can be relieved from providing leave for COVID-19 to employees, with some exceptions.

On April 1, 2020, the US Department of Labor DOL published a 124-page “Temporary Rule” providing much-needed guidance on the emergency leave law entitlements under the Family First Coronavirus Response Act (FFCRA). Importantly, the rule includes instructions on an important exemption that may help struggling small employers opt out of part of the law.

Congress passed the FFCRA in March 2020 in part to help American workers cope with the economic disruption and health effects of the COVID-19 pandemic. The FFCRA offers two types of paid leave: (A) up to 80 hours of emergency sick leave; and (B) longer-term paid family leave. We previously wrote about these leave rights in detail here.

Both types of leave apply generally to employers with fewer than 500 employees. The long-term leave portion of the FFCRA includes an exemption for businesses with fewer than 50 workers for whom granting leave would “jeopardize the viability of the business as a going concern.” The FFCRA, however, left it to the Department of Labor (DOL) to issue guidance defining how businesses would qualify for the exemption. The DOL finally issued this guidance in the form of a “Temporary Rule” on Wednesday, April 1, 2020, and it comes not a moment too soon considering the FFCRA went into effect the same day.

Under the guidance, which can be found here the DOL instructs that these small employers will not have to provide leave if doing so would:

Raise expenses above revenue such that the employer would “cease operating at a minimal capacity”; or

The absence would “pose a substantial risk” to the employer’s financial health or operations because of the requesting worker’s skills, knowledge or duties; or

The employer can’t find enough workers to perform the work of the employee requesting an absence, if that work is necessary for the business to run at minimum capacity.

The DOL says that an “authorized officer of the business” must make the determination that the leave request falls into one of the three categories.

Such employers are not exempt from the two-week sick time requirement unless the worker is requesting time off to care for a child whose school has closed, however.

The guidance is effective April 1, 2020 and expires on December 31, 2020 as does the FFCRA.

We are here to help. Please contact us when you need our assistance with complying with the FFCRA or addressing other COVID-19 related employment issues.